Portugal Will Have the Cheapest Solar Energy in Europe

Portugal is clearer than Spain when it comes to betting on renewable energy and is positioned to take the lead.


Portugal is clearer than Spain when it comes to betting on renewable energy and is positioned to take the lead. The neighboring country closed its first renewable energy auction with the lowest price in Europe and one of the lowest in the world.

It seems that Portugal is clearer than Spain when it comes to betting on renewable energy. The neighboring country closed its first auction of renewables with the lowest price in Europe and this can mean a breath of air for Spain because, in the end, it hosts similar weather conditions and a very similar level of solar radiation.

The Portuguese market has closed its first auction of solar energy with a price of 20 euros per MW / h, half of the current price of the Iberian market. The figure is not trivial because it is one of the lowest in the world and comes to confirm the investment interest in the renewable energy sector, more specifically, in the solar energy market in the Iberian Peninsula.

1.2% of the Sahara could supply the entire planet with solar energy
The 1,400 MW photovoltaic market that raised up to 1,200 million euros of investment went to the Portuguese market. Although there are still no official results, it is known that the prices of some awards were very low, according to El Economista. The minimum price, however, was marked by Brazil a few weeks ago, with 15.49 euros per MW / h.

Spanish energy companies have already set their sights on Portugal. So much so that Iberdrola has been awarded the largest number of lots in this first photovoltaic auction of the Portuguese market. Even so, according to the Portuguese Secretary of State for Energy, the greatest power went to the French Akuo, with up to 370 MW, as recorded by Cinco Días.

Beyond this first photovoltaic power auction, there are other things that Portugal has been doing well: energy from renewable sources in the Portuguese country represents a significantly higher percentage of electricity consumption compared to Spain, the neighboring country has reached record highs. wind consumption to which Spain does not approach and has previously entered marine wind energy. To all this we must add the speculative threat that hangs over the Spanish renewable energy market.

Spain produced 35% less renewable energy in 2018 than Portugal

However, although Spain has more coastline and surface and has similar light and weather conditions to Portugal, Spain produces 35% less green energy.

While in the Portuguese market 75% of electricity consumption came from renewable energy in 2018, in Spain electricity from clean energy accounted for 40% (taking into account the particular case that the sun tax had not yet been repealed), as published by La Sexta.

Portugal has 1.22 GW of photovoltaic capacity in its portfolio, which are in different stages of development, according to a GlobalData report. The objective is for the figure to rise to 1.74 GW by 2023 but the figures from the recent auction and the one forecast for January 2020 indicate that in 2023 it will reach between 3.8GW and 4.3 GW.

However, everything indicates that Spain will take the lead. It is true that none of the solar energy projects awarded in the Spanish market were connected to the network last year, however, the publication Renewable Energies estimates that the photovoltaic solar capacity in Spain could reach 24.5 GW in 2023. This figure would mean installing an additional capacity of 19.5 GW in the next five years. On a more distant horizon, the National Energy and Climate Plan plans to install more than 30 GW of solar energy until 2030.

In February, Portugal set a record for green consumption with 90% of wind production

But in addition, on February 1, Portugal again set records by recording that almost 90% of electricity consumption was of wind power. The Portuguese country took advantage of Spain with a daily production of 102.8 Gwh and 4,594 MW at the peak of maximum power, according to ABC.

But it is not the first time. Already in March 2018, the Portuguese country managed to become a reference in renewables. The energy needs of that month were covered with green energies: between hydraulic, wind, solar, geothermal and biomass sources. In fact, at this time the production of clean energy exceeded, for the first time, the demand, according to data published by the Portuguese Renewable Energy Association and the international Sustainable Earth System Association and collected by Euronews.

Spain, even with some pilot projects underway, does not have any offshore wind farm. In fact, it was not until this April that the first timid raid arrived: the first turbine on the coast of Gran Canaria began producing electricity. Also at this time, competition gave the green light to install the first turbines on the coast of the Basque Country, as El Economista reported.

Renewables in Spain face a speculative maelstrom

In this context, Spain has to save a stumbling block: the speculative one. Spanish regulatory authorities fear that a speculative avalanche threatens the development of renewable energy in the Spanish market. As Reuters reported, competition warned of the existing speculation with the connection points for future renewable projects.

Permits are obtained in exchange for a deposit but the regulatory body warned that the holders of these permits may have no real interest in the development and commissioning of the facilities, “but in obtaining a benefit with the transmission of permits”, picked up Europa Press.

Last month, the CNMC said in a statement:

“Some speculators stock up on the limited capacity available in order to speculate with it or paralyze the installation of viable projects.”

The warnings of the regulatory body have not yet translated into legislative actions due to the paralysis of the Government after the elections, given the impossibility of reaching an agreement.